Home>News> Inflation continues to accelerate in November as food prices surge

Brazil Inflation

Brazil: Inflation continues to accelerate in November as food prices surge

November 23, 2010

According to the mid-month price index (IPCA-15, indice de Precos ao Consumidor Amplo), consumer prices added 0.86% over the same period last month following on a 0.62% increase in mid-October. The reading, which overshot market expectations of a 0.72% increase, was driven by rising food and beverage prices. Food and beverages account for more than 20% of the consumer price index and surged 2.11% in the period through mid-November. The spike in food prices reflects a temporary supply shock, which has quickly passed through to consumer prices in the context of rising wages and historically low unemployment. As a result of the higher-than-expected price increase, annual inflation jumped to 5.5% in mid-November (mid-October: 5.0% year-on-year). According to the IPCA-15 index, inflation has now exceeded the Central Bank's target rate of 4.5% for a third consecutive month. Data for the full month will be released on 8 December.

Sample Report

Looking for forecasts related to Inflation in Brazil? Download a sample report now.

Newsletter Subscription

Brazil Economic News

In December, economic activity rose 1.4% from the previous month in seasonally-adjusted terms, according to the Central Bank’s monthly indicator for economic activity (IBC-Br, Indice de Atividade Economica do Banco Central).

Retail sales (excluding cars and construction) fell 1.5% from the previous month in seasonally-adjusted terms in December, which contrasted November’s revised 1.0% increase (previously reported: +0.7% month-on-month).
Declines were seen nearly across the board, with only two of the eight components of the index seen growth in sales.

At its 7 February meeting, the Central Bank of Brazil’s Monetary Policy Committee (Comité de Politica Monetaria, COPOM) decided to cut the benchmark SELIC interest rate by 25 basis points, a smaller cut than the 50 basis-point reduction it made at the previous meeting.